The unemployment rate in Los Angeles County fell to 8.3% in April from 8.7% in March. One year ago the rate was at 10%. County employers added more than 91,000 jobs to their payrolls over the last year for a growth rate of 2.2%.
The minutes from the Federal Reserve’s April 29-30 meeting released this week showed that the Fed is contemplating how it will raise interest rates. The Fed has made no decisions on which options it will select. The minutes showed that the Fed’s version of the economy is in line with what investors are seeing, that economic growth is happening, but not at a robust rate.
It was a strong week for the stock market. The Dow closed at 16,606.27 up 0.70% from last week’s close of 16,491.31. The Nasdaq had a strong week, closing at 4,185.81 up 2.33% from last week’s close of 4,090.59. The S&P 500 ended the week by closing above the record-setting 1,900 mark at 1,900.53, up1.20% from last week’s 1,877.86.
The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate hit a another new low for the year, falling to 4.14% from 4.20% last week. The 15-year-fixed fell to 3.25% from last week’s 3.29%. A year ago the 30-year fixed was at 3.59% and the 15-year was at 2.77%. Rates for 30 year loans over $417,000 are about 4.375% and 15 year loans over $417,000 are around 3.5%.
The 10 year Treasury bond yield ended the week at 2.54%. It was 2.53% last Friday and 2.02% a year ago
Freddie Mac released its U.S. Economic and Housing Market Outlook for May which projects new home construction to increase by 18% and house price appreciation to hit an annual growth rate of 5% in 2014. The prediction is for new and existing home sales to hit 5.5 million, the same as in 2013. Refinancing is expected to represent around 40% of this year’s loan originations. Freddie Mac predicts that the 30-year-fixed-rate mortgage rate will end the year around 4.6%.
Fannie Mae economists issued a report stating that they expect economic growth to accelerate to slightly more than 3% for the year. Fannie Mae predicts that while housing activity will experience a rise over the next few months it won’t be until late 2016 that housing will reach normal levels. The economists are predicting existing home sales to fall by -2.1% this year to 4.98 million while prices appreciate by 5%. This is a national prediction. We know its ridiculously low for our market as we have already seen a much larger gain this year. Expect prices to rise in the 12% range!
The National Association of Realtors® reported that sales of existing homes posted their first gains of the year in April rising 1.3% to a seasonally adjusted annual rate of 4.65 million in April from 4.59 million in March. Sales were down -6.8% from April 2013. Existing-home sales in the West rose 4.9 % to a pace of 1.08 million in April, but are -10% below a year ago. The median existing home price rose 5.2% to$201,700 in April. In the first quarter of 2014, the median price was 8.6% higher than the year before. The median price in the West was $291,200, which is 9.7% above April 2013.Housing supply has risen, up 16.8% from March 2014 to 2.29 million in April. Inventory is up 6.5% from a year ago with 5.9 months of inventory currently compared to 5.1 months in March and 5.2 months in April 2013. Also national. We are seeing more like a 3 month supply in Southern California.
The California Association of Realtors® reported shares of equity sales continued to rise in April, up to 88.4% of all sales from 87.6% in March. Equity sales made up 75.4% of sales in April 2013. In Los Angeles County distressed sales made up 12% of sales in April, down from 13% in March, and from 24% in April 2013. The Pending Home Sales Index fell -0.5% from 114.4 in March to 113.8 in April, based on signed contracts. The month-to-month change was substantially lower than the -6.5% drop from March to April observed in the last three years. Pending sales were down -6% from the revised 121.1 index in April 2013. We need more inventory to get the number of sales up!
The Census Bureau reported that sales of new single-family houses in April 2014 were at a seasonally adjusted annual rate of 433,000, which is 6.4% above the revised March rate of 407,000 but down -4.2%from April 2013’s estimate of 452,000. The median sales price of new houses sold in April 2014 was $275,800. The seasonally adjusted estimate of new houses for sale at the end of April was 192,000. This represents a supply of 5.3 months at the current sales rate. Also a national figure.
Have a great holiday weekend! For those of you that are remembering fallen loved ones, Linda and I extend our deepest sympathy and gratitude for your loss and sacrifice.
If you’d like more information on the San Fernando Valley or Los Angeles, or to have help looking for your next home, please feel free to reach out! I’m happy to help, no obligation.